When a bubble is not a bubble

Looking at the charts of Asian markets, they immediately scream 'bubble' - spectacular gains that must surely be followed by a fall. But the charts don't tell the whole story. Cris Sholto Heaton looks back at the history of Asian markets to give a new perspective on the continent's booming stockmarkets.

After I wrote about Indonesia last time, a reader said that he had one major concern. The chart of the Jakarta stockmarket looked disturbingly like a bubble. And in many ways I agree. Looking at long-term charts of Asian markets, I often have the same sense. The gains of the last few years look far too big to be genuine. Rises like these must be followed by a fall at some point.

But is that impression fair? Have Asian markets really come too far too fast? Or do the charts not tell the whole story? This week, I'm going to delve into history, going back further than the five or ten years that most investors tend to focus on. You may well not have seen most of these charts before. I hope they at least give you a new perspective on the Asian boom.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.